Delivery cost to Non inventory account

1. Delivery Costs to Non Inventory Account

1.1 Delivery Costs Definition:

Delivery costs are one of the important conditions in MM pricing procedure and also in procurement process. As per
the standard SAP functionality, these delivery costs can be paid separately to specific delivery vendor although
materials are procured from other vendor.

1.2 Introduction Delivery costs to non inventory account:

Delivery costs are paid to main vendor or transport vendor as per the requirement but generally it loads on material
cost. In some industries Freight/Customs duty/insurance paid to the vendor can be reimbursed, in such cases costs
incurred for these activities should not be inventoried (Legal requirement in some countries). It should be collected
in different account and can be utilized / reimbursed. To map this requirement, we should follow a separate
process with few settings in configuration. In this document, I have explained the process with detailed
configuration steps.

1.3 Required accounting entries

Let’s take Material Price is 30 INR and Quantity 10. Freight cost is 30 INR.

Goods Receipt:

Stock Account - 300 Dr

GR/IR Clearing - 300 Cr

Freight on non inventory - 30 Dr

Freight clearing account - 30 Cr

Invoice Receipt:

Vendor Account - 330 Cr

GR/IR Clearing Account -300Dr

Freight Clearing Account -30 Dr

1.4 Application Design

  New condition type to be created by copying the standard condition type FRA1/FRB1/FRC1
 Condition category of the new condition type should be Blank and maintain X-Negative value in
the plus/minus field. Accrual must be flagged.
 Create new account key and assign this account key to new condition type in pricing procedure
 Maintain new GL account for this account key in OBYC
 Assign new condition type next to the standard condition type in the pricing procedure. Both the condition
types must be maintained in the pricing procedure.

1.5 Step by step configuration:

New condition type needs to be created by copying FRA1/FRB1/FRC1 along with below mentioned settings. This is
done in below path:

SPROIMGMaterial ManagementPurchasingConditionsPrice determination process Define Condition

types

OR

Transaction Code: M/06

Accruals must be activated for the condition type ZFRA

Create new account key ZFR in below path

SPROIMGMaterial ManagementPurchasingConditionsPrice determination process Define
Transaction/Event Keys

Assign G/L account to account key ZFR in transaction code OBYC with below settings
Assign new condition type next to standard condition type in pricing procedure and also assign new account key to
new condition type.
1.6 Transaction (General Procurement) Process Step by Step

Once the configuration settings are completed, purchase order needs to be created with below conditions. Same
freight condition amount has to be given for both FRA1 and ZFRA.

Then document needs to be posted in MIGO. Accounting entries are given below after posting
Then Invoice posting will be done against purchase order and the accounting entries are given below

1.7 Important Transaction Codes:

 SPRO- Customizing-Edit Project

 M/06- Define Condition Types
 M/08 – Conditions: Schema for Purchasing
 OBYC - C FI Table T030
 ME21N - Create Purchase Order
 MIGO - Goods Movement
 MIRO - Enter Incoming Invoice

1.8 Helpful Hints:

 Press F1 for help

 Press F4 for getting input values

 Click to go to previous screen.

 Click to go to Exit the transaction or to log off.

Click to go to cancel the transaction

Thanks for downloading this document. I hope this document will be helpful. Share with your friends and
colleagues who are learning SAP to make it more useful

Have a good day

Best Regards,

Ganesh

SAP MM/WM Consultant